Auto industry CEO’s don’t make any more on average than CEO’s in other industries with similar size companies. They are actually pretty much mid-pack.
The bailout has EVERYTHING to do with the UAW! Have you ever asked yourself why the only auto companies that are failing are the ones with master UAW contracts? They are laying off and closing plants left and right. You don’t see that with Honda, Toyota, BMW, and other transplant companies with non-union US plants.
A full discussion of how the UAW has completely subverted the Big-3 would be a virtual dissertation. The basic fact is the cost of paying employees wages and benefits for not working (job bank) and the enormous obligations to retirees for pensions and health care is breaking the backs of the Big-3. They actually negotiated new contracts to turn over a lot of that to the UAW, but the contract provisions don’t go in place until 2010, even though they were signed in 2007.
And do you remember that the UAW went on strike at GM one year ago? I guess “breaking the company” was a pretty bad idea back then, huh?
And the problem isn’t so much the pay as it is the unwillingness to do the work that they are being paid for. I’ve worked in the auto industry for most of the last 15 years, including management and engineering positions in plants organized by the UAW, IUE, and Steelworkers. I’ve seen it all first hand - equipment sabotage, deliberate slowdowns, intimidation of workers who did their jobs well, excessive absenteeism, abuse of FMLA statutes, corruption of local officials, you name it. The name of the game is to work a little as possible during straight time to get as much overtime as you can.
Now, I freely admit that it’s an 80/20 situation, even a 90/10. Most of the people do a good job and care about the quality of their work. But the ones who don’t really screw things up for everyone else. Now I suppose you might ask, if you were in management, why didn’t you do something about it? Ah, you see, I did and I have. But it takes a strength of will and support from your superiors that most managers don’t get. The constant fights with the union over BS and the constant efforts of the union to go over your head and undermine you with the senior management is something few people will put up with for very long until they simply start going with the flow.
Unfortunately, that’s how a lot of senior managers got to where they are - by going with the flow and playing politics. Years ago, that was the best way to get ahead because doing the right thing would generate so much union retaliation that it wasn’t worth it. So they settled for higher costs and lower efficiency because it was better than a wildcat strike. But now, you can’t do that anymore. Margins are so tight that you really have to achieve the efficiencies or the work will go somewhere else. And still, the UAW fights…